Task:
See attached file 

3000 words max (excluding annexes and references) 

Pedagogical aim and expectations:
To show how you can estimate the best way to use your capital once you have stopped working, and to use data provided by Morningstar www.morningstar.com to help you decide about equity investing in particular companies. Finally, to show basic understanding of cash flows in bond calculations. Calculations should be used eg. NPV. Future Value and IRR.

Your pension

Suppose you have reached retirement. You have saved a good

mount of money, say EUR 500,000, but, if you wish to take a

currency and and an amount more realistic for your country,

please do so.

You are now to make a comparison between two approaches to

using your wealth to see you through retirement:

A. Establish what yearly pension a life insurance company is

prepared to pay you for the rest of your life.

B. You manage your wealth yourself. Set an amount you want to

withdraw each year, and estimate what percent you can earn on

the outstanding balance.

All you numbers should be realistic for you and your country

and your situation.

Do stick to my simplifying conventions about the table

reflecting end-year movements and balances, and have a year

zero.

Share Analysis

Choose two companies from “Morningstar”. One should be a

company you might like to invest in and the other one you would

avoid.

Using the data on the Morningstar database available in the

library, explain the signification of the various financial

ratios related to the two companies you have chosen (e.g.

Price/Earnings, Price/Book, Price/Sales, Price/Cash Flow,

Dividend %).

Prepare a brief description of each company and explain why

one attracts you the other not.

3000 words